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Research Tree provides access to ongoing research coverage, media content and regulatory news on FIAT CHRYSLER AUTOMOBILES NV. We currently have 11 research reports from 1 professional analysts.
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FIAT CHRYSLER AUTOMOBILES NV
FIAT CHRYSLER AUTOMOBILES NV
Selling cars at discounts via Amazon
21 Nov 16
Fiat is starting to sell some of its cars via Amazon in Italy. It will begin with the Fiat 500, 500L and Panda, and these cars are believed to be sold with a 33% discount. Once the client has found his/her car on Amazon, he/she will be directed to a dealership that can deliver the car.
Management’s higher 2016 guidance still below our expectation
25 Oct 16
FCA reports unchanged revenue of slightly less than €27bn for Q3 and €81.3bn ytd. This was achieved although worldwide shipments were down by 4% to 1.07m vehicles in the last quarter, i.e. the group achieved some ASP improvement. Stated EBIT was up from €225m in Q3 15 to €1.34m and from €2.15bn to €3.71bn ytd. 9M net profit turned around from a loss of €103m to a profit of €1.4bn. Whereas the revenue numbers are only slightly below our expectation, the profit numbers and management’s new guidance suggest that our full-year projections are unlikely to be reached.
2016 targets raised and new 2018 projections unrealistically high
12 Sep 16
Management has raised its 2016 guidance and also increased its 2018 outlook. Revenue and EBIT numbers of €112bn and €5.5bn for the current year are very much in line with our expectations (€113.5bn and €5.4bn, respectively). However, management is overly optimistic for the next two years. By 2018, revenue is expected to reach €136bn (+10% p.a.) and EBIT between €8.7bn and €9.8bn (the middle yields an annual appreciation of 30%). At a time when the US market is likely to be close to its current peak, these projections seem to be wishful thinking. From 2015 to 2018, volume sales of the Jeep brand are expected to increase by 17% annually (from 1.24m units to 2.0m) with the strongest growth rates of some 70% in APAC and LatAm and 30% in EMEA. Besides the American plants, FCA intends to also produce these SUVs in China (two plants) and Italy. The Jeep brand alone cannot contribute sufficiently to the above 2018 revenue number. Other large-volume brands (like Fiat) need to increase their production and sales numbers as well, whereas the Chrysler brand is likely to suffer from the US consumers’ reluctance to buy sedans. Although the group intends to present numerous new models, capex (including capitalised R&D) is expected to remain unchanged at €8.5-9.0bn from 2016 to 2018. This plan, according to management, includes spending to support the development of advanced technologies and to meet regulatory compliance requirements. In fact, as revenue is projected to increase sharply, capex as a percentage of net revenues is expected to decline. Management argues that this is in line with the industry average. Our current projections for the auto industry (including suppliers) see capex (as a percentage of revenue) rising from just below 8% in 2015 to 8.3% by 2018. As a result of the above, management expects net industrial liquidity to turn around from net debt of €5.0bn at the end of 2015 to net cash of €4.0-5.0bn at the end of 2018. Conclusion: we find FCA’s new 2018 targets as being very ambitious indeed. In fact, the expected revenue growth numbers do not match capex projections and legal requirements to fulfill emission requirements. As a consequence, we do not see net liquidity turning around by some €10bn within such a short period of time.
Good earnings numbers in Q1 16
26 Apr 16
On an adjusted basis, i.e. excluding Ferrari, FCA’s deliveries fell by slightly less than 1% to 1,086k vehicles. As the ASPs were, except for EMEA, up in all regions, revenue increased by 3% to €26.6bn. This translated into EBIT of €1.31bn (+88%) and net profit of €478m (from €27m in Q1 15). While the volume and the revenue numbers both fell short of our projections, earnings were higher.
Net profit from continuing operations -40% in Q4 and -74% in 2015
27 Jan 16
FCA’s headline numbers (i.e. number of shipments unchanged at 4.6m and revenue +18% to €113bn) were not much different from our projections. However, Automotive revenue fell by 1.6% to €27.7bn in Q4 15 and, as shipments were only down by 0.6% to just below 1.21m, the ASP fell by 1.1% to €22,898. For the full-year, the ASP is up by 14% to €22,434.
Management’s very ambitious but unrealistic plan for 2018
04 Dec 15
Within the next three years, and based on our current 2015 projections, FCA intends to increase its annual volume by some 50% to 7m vehicles, revenue by 16% to €132bn, and EBIT by some 100% to a good €9bn. Based on management’s latest 2015 guidance the respective growth rates are c. 45%, 20%, and a good 100%. Management intends to achieve this by executing its premium strategy and by moving away from the European mass market. Simultaneously, the globalisation and localisation of the Jeep brand is in focus. Another focus is on Alfa Romeo, which is seeing its sales numbers falling sharply year after year. Management had promised before that this will change, but nothing has happened up to now.
09 Dec 16
Ideagen* (IDEA): Acquisition of IPI Solutions (CORP) | Lombard Risk Management* (LRM): Atos deal improves routes to German market (CORP) | Photo-Me* (PHTM): Upgrade to FY forecasts (CORP) In other news… Frontier Developments* (FDEV): ED coming to Xbox and Planet Coaster update (CORP) | LiDCO* (LID): Analyst interview (CORP) | Rude Health: Analyst interview
Product quality and management depth
07 Dec 16
Yesterday Focusrite held a capital markets day, designed to showcase the range and quality of products and introduce operational management, which shares a passion for music-making and has deep knowledge of the products. This contributes to excellent product support, software innovation and thus customer loyalty, which should sustain the company’s brand leadership.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
Civil: No Reflation here, only a Race to the Bottom
05 Dec 16
The strengthening of the US dollar since the election of Trump is adding to the headwinds in the airline industry: over-capacity and falling yields. The airline industry, which is expected to generate $8bn of free cashflow in 2016 on $600bn of capital employed, needs to spend $120bn annually to maintain current delivery rates. Deferrals and down-gauging is now spreading to narrow-bodies as more and more airlines review their capex plans. We expect acceleration of seat densification as airlines look to sweat their existing fleets. We now expect deliveries to fall by 5% over 2015-18 as opposed to our previous forecast of flat growth. Aftermarket may also suffer as seat densification helps cut number of flights. This leads to reduction in our EPS forecasts for key Civil Aerospace names: Rolls-Royce, Meggitt, GKN and Senior.